Profits fall at Irwin Mitchell after merger

Andrew Tucker, chief executive of Irwin MitchellAndrew Tucker, chief executive of Irwin Mitchell
Andrew Tucker, chief executive of Irwin Mitchell
LAW firm Irwin Mitchell has taken a hit on its pre-tax profit following its merger with Thomas Eggar with the figure falling by more than 25 per cent.

The Sheffield-headquartered firm saw pre-tax profit drop to £12.4m in the year to April 2016, down from £16.7m the previous year as revenue rose 8.2 per cent to £221.3m, up from £204.5m.

Chief executive Andrew Tucker hailed 2015/16 as a ‘transformational’ year for the firm as it completed the largest merger in its history.

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He said the firm had taken a ‘short-term’ hit on its profit following a decision to fast-track the integration of teams and all IT systems from Thomas Eggar into the wider group. The combination of investment and a necessary focus on the merger and successful integration had had an impact on the bottom line, he said.

Mr Tucker said he was confident in the group’s ability to deliver further growth in 2016/17 onwards due to its strong strategy and clear plans for the enlarged firm to drive value for both the business and clients.

Revenue growth was seen in a number of areas in the existing group pre-merger, with additional revenue coming from the first full year of Berkeley Law within Irwin Mitchell since its acquisition in November 2014, and from the Thomas Eggar business post-merger.

The merger with Thomas Eggar was part of the firm’s plan to strengthen business and private client services while remaining a leader in complex personal injury cases, Mr Tucker said.

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Irwin Mitchell completed the merger with Thomas Eggar in December 2015 creating a business where legal services to businesses and high net-worth private clients account for half the group’s turnover. The remainder comes from the personal injury business.

It boosted the group’s footprint and range of legal services offered in London and the south east, adding markets in Newbury, Crawley and Chichester as well as an additional office in Southampton, where Irwin Mitchell opened its own office in 2014.

The group launched Irwin Mitchell Private Wealth in April this year, combining the private client teams from Irwin Mitchell, Thomas Eggar and Berkeley Law under one banner. It completed a second acquisition in the year, P&A Receivables, and opened a consulting office in Middlesbrough in 2015.

Mr Tucker said: “There are many reasons for real confidence in our business, despite the reduction in profit this year. That is a short-term issue driven by the significant investment in the merger to ensure it was a success.

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“The board is comfortable that sacrificing profit in the short-term will deliver greater benefits to the business in the medium-term as we reap the return on investment and the improved strength and breadth of depth the merger has given us.”

He added: “The merger understandably dominated the past 12 months at Irwin Mitchell and it is a transformational transaction for the group but there were many other things to be proud of in the year, from landmark legal cases to excellent client care throughout the 12 months reported and the launch of Irwin Mitchell Private Wealth in a core market for growth.

“Our focus in 2016/17 is on completing the successful integration, maximising the opportunities for growth which arise from the greater strength and depth we now enjoy.”